This column was first published in the October edition of Meat Management Magazine
Food businesses that have shown incredible leadership and resilience by working throughout the pandemic and providing essential services for the nation are now suffering financially. British food producers that have kept this country running amidst the biggest crisis of our lifetime have been treated differently from the businesses that remained shut down during the lockdown period.
It is not fair that responsible businesses are being penalised after having worked around the clock, invested in a whole range of safety measures, cared for their livestock, and looked after their workers. British poultry meat businesses compromised by COVID-19 and forced to shut down should receive equal consideration in the compensation mechanisms that were available to those who did shut down during lockdown.
It is highly unfair to expect the meat plants impacted by COVID-19 to shut down for over two weeks, essentially dispose off their stock (cull birds on farm) and receive no compensation for their lost livestock or furlough for their staff.
The poultry meat supply chain is highly integrated and works on a very tight turnaround. The UK rears and slaughters around 20 million birds every week with the majority being processed through a small number of large premises (each with a capacity of 2 million+ birds per week). As an efficient sector, there is very little spare capacity when a large slaughterhouse is forced to shut down.
Losing a large slaughterhouse impacted by COVID-19 not only interrupts our food chain, but also results in the need to humanely remove birds from the supply chain and avoid welfare issues. In addition to the operational losses of plant closure (cost of lost stock and disposal), the additional revenue loss results in significant cost to business. BPC member businesses have reported in excess of £10m lost over the two-week period of plant closure in addition to loss of revenue streams.
British poultry meat businesses who do not receive any subsidies as part of the Common Agriculture Policy and yet offer £5.5bn GVA contribution to UK GDP and over £1.2 billion in tax contribution to the Exchequer, have been the hardest hit.
In the last six months, the poultry meat businesses that have not been able to process the birds have had to make some very tough financial decisions. Given that a lot of the business cost is locked up in livestock, the inability to process the birds mean those costs essentially go to waste.
It is tragic that food producers that were celebrated as ‘Food Heroes’ at the start of the pandemic have not received anything to date in terms of compensation for the operational losses of plant closures and are being forced to bear all the costs internally. This will have a significant impact on our national food security at a time when we cannot afford it.
While the Defra Secretary of State and officials have been in constant dialogue with our businesses about potential ways to mitigate the financial damage, a more serious and concerted cross-departmental action is required to ensure food producers impacted by COVID-19 are supported back to recovery.
As the trade association for poultry meat farmers and producers up and down the country, the British Poultry Council is calling on the Government to urgently work with us to find a solution that ensures poultry meat businesses impacted by COVID-19 have access to financial support so that they can remain financially viable and can carry on putting food on every table.